Lawsuit hits struggling Illinois Obamacare plan

Two University of Chicago Medicine patients have filed a class-action lawsuit against Land of Lincoln Health, saying they wouldn't have bought the Obamacare plan if they had known their doctors would be dropped from the network.

Chicago-based Land of Lincoln, which was created under the Affordable Care Act to stir competition and drive down prices on the health insurance exchange, said last month that it was cutting U of C Medicine from its network as of March 1.

The lawsuit is the latest blow to the insurer. Its net losses swelled to $50 million heading into the third year of the exchange in the fall. The insurer, which has nearly 70,000 members, has stopped taking on new customers to cut costs. Land of Lincoln is a federally backed co-op. Of the 23 created, 12 have closed after struggling financially.

Land of Lincoln Health does not comment on pending litigation, spokesman Dennis O'Sullivan said.

The complaint, filed in Cook County Circuit Court, alleges that Land of Lincoln sold Daniel Blumenthal and Michael Hartzmark a health plan for 2016 that included in-network coverage for U of C Medicine, though the insurer knew that the Hyde Park-based specialty hospital would not remain in its network.

Land of Lincoln's conduct "constitutes misconduct violating the state consumer fraud statute and has resulted in the defendant's unjust enrichment," the complaint alleges.

Dec. 17, 2015, was the deadline to enroll in a plan on the Obamacare exchange for coverage starting Jan. 1. The lawsuit alleges that before Dec. 18, U of C Medicine told Land of Lincoln Health it wasn't open to renegotiating new reimbursement rates. The insurer allegedly did not disclose that to consumers buying its plans.

U of C Medicine told its patients in a letter in late December that it no longer would be in Land of Lincoln's network as of March 1.

Consumers pay discounted prices and share the cost of their medical bills with their insurer if they see doctors and hospitals in their network. They shoulder a larger share of the cost if providers are out of network.

Blumenthal and Hartzmark, patients of U of C who live near the health system, would not have bought a Land of Lincoln plan had they known the South Side hospital network wouldn't be in it, the complaint said. Now they and other proposed members of the class-action lawsuit will pay more for their care or must buy policies from other health insurers that could be more expensive, the lawsuit alleges.

Blumenthal and Hartzmark already have paid deductibles this year toward their Land of Lincoln policies and will have to pay a new deductible if they choose a health plan from another insurer, the complaint said.

PAYING MORE

Blumenthal has been treated at U of C Medicine for a chronic disease for more than 10 years, the lawsuit said. He had only until Jan. 31 to buy a plan from another insurer with U of C Medicine in its network; he did so, and the premiums are about $170 more per month than his Land of Lincoln plan, the complaint said.

He already had spent up to $600 on medication, paying the full cost because he hadn't yet hit his $1,000 deductible before Land of Lincoln would have started sharing the cost of his drugs. After changing to a new policy, Blumenthal will likely have to start over on a new deductible, the complaint said.

Hartzmark bought insurance for himself and his wife, who was stricken with a rare and life-threatening viral infection in 2015 and was treated at U of C Medicine. They wanted to continue to receive care there, the complaint said.

Hartzmark says he received an email from Land of Lincoln on Jan. 27 that he had only until Jan. 31 to buy a plan from another carrier to continue to have U of C Medicine in-network, the complaint said.

He bought a new plan from another carrier. The premiums are about $825 more per month than those on his Land of Lincoln plan, the complaint said. He also will have to start from zero on his new deductible.